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2011/11/22

On German sovereignty and the fiscal crisis in Europe

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Having regained sovereignty and full liberty only in 1990, many Germans insist especially on German sovereignty. I can't offer a poll, but it's obvious that we have a background that nourishes such an insistence more than average.
This is relevant in regard to the current fiscal crisis in Europe.

Are the collapsing governments collapsing because of inappropriate foreign pressure?

Does the German government (of which I'm no fan, btw) impose some kind of German rule on Europe?

On the first question I'd say yes, there's inappropriate outside influence, but in the end this is about representative democracy. Many countries do not elect their head of government directly, but through parliament. Parliament has a mandate for legislation and picking a head of government for a set period (such as four years, for example). It's perfectly constitutional and working as intended if these members of parliament pick a new and unexpected head of government during that period. They're supposed to, unlike many commentators imply.
It's not what we're used to, but it's perfectly within the bounds of representative democracy. Don't blame outside pressure - blame their constitutions. Then again, it's their job to be bothered about their constitution, not a foreigner's.
So yes, foreign pressure had influence and demands were inappropriate, but the countries are still working as intended in regard to selecting their cabinets.

- - - - -

Now about the German influence. Germany says no to several actions (such as ECB lending money directly to states or a step towards a transfer union) that were agreed not to happen in treaties years ago. These parts of those treaties were in German interest and were part of the trade-off that led us to sign and ratify them. Plus; they're important to us.

The other countries want to get rid of those rules without doing the legally obvious thing; leaving the treaty (and lose THEIR trade-off benefits) themselves. Instead, they want us to forfeit our advantage (and timportant monetary policy standards) and accept a violation of legally binding treaties. They want our government to ignore legal norms, to accept our membership in a treaty that's being executed differently than legitimated by German democracy (signed and ratified) for Germany.

In the end, they want us to forfeit our sovereignty in favour of their advantage. After all, the supposed German dominance that now exists over Europe is nothing but the insistence on adherence to treaties that were signed and ratified by all Euro zone countries.

I cannot spot a German threat to the sovereignty of other European countries or a German plot to rob others of their benefits, but I pretty much laid out how their striving for a violation of treaties demands us to become subject to a treaty interpretation that we never agreed to. It's an assault on German sovereignty!

Keep in mind; the European countries that dislike the German insistence on the treaties as written on paper are free to exercise their sovereignty and cancel their membership in any treaty any time. They should blame their negotiators, not the German government that pursues German interests - as is our right since we regained sovereignty.

It's astonishing that this can already be interpreted as a threat to others' sovereignty.

S Ortmann

P.S.: Short version:
"They" want Germany to be subject to an agreement that it never agreed to, nor would have agreed to.
"Germany" wants "them" to be subject to an agreement they actually agreed to (until they exercise their right to quit it entirely)..

38 comments:

the definition of foreig debt:the total public and private debt owed to nonresidents repayable in internationally accepted currencies, goods, or services,[1] where the public debt is the money or credit owed by any level of government, from central to local, and the private debt the money or credit owed by private households or private corporations based in the country under consideration.

And Germany's numbers: Germany 4,713,000,000,000 30 June 2010

So I'd say it's a little more complicated. If you add to this the leverage factor of Germany's financial sector and the medium age of the population Germany doesn't look so good any more. And right now " the markets " are about "to discover" this facts.

The same transfer of sovereignty will happen in Germany due to the high level of debts and the fragility of the financial system. A comissar will also take care of the insolvent Bundesrepublik. It's just a matter of timing, it happens step by step.

You should read more carefully and not assume that the two texts are mutually exclusive. They are not. In fact, I knew back in '99 about the risks of the monetary union because a lot of theoretical research had been published on the optimal currency area by the mid-90's. I do largely agree with the quotes at the link.

They do play a semantics game, though: What they call a "fiscal union" is a "transfer union". That's not going to happen with Germany, for 4/5th of Germans already had that for two decades, subsidising East Germany. It sucks much lifeforce out of the West German society.The other Euro member countries explicitly agreed to a ban on transfers in a treaty because it was a condition for Germany's ratification, and it's Germany's legal right to insist on adherence to that treaty (unless a treaty partner cancels its treaty membership = leaves the Euro zone).Some other treaty members are in turn entitled to criticise the German failure to meet the 3% GDP new debts limit in '02/'03 (this was tolerated, though). We did repair our fiscal lack of discipline with a change of our constitution.

The austerity policies don't work, but that's an old story. IMF and World Bank did this with Latin American countries for decades with horrible results. Powerful countries always insist on austerity when lesser countries are in fiscal troubles, but they never apply these recipes at home, for they are painful and unsuccessful.

Besides; "Consider the comment section as a place where you're a guest."http://defense-and-freedom.blogspot.com/2008/05/comment-policy.htmlYour style was borderline.

- That gross figure is hardly an interesting statistic. You should rather look at the net international investment.

Theoretically you're right. But the problem is rating. If and when " the financial markets " discover the numbers interest rates increase exponentially. Details are irelevant for the present discution, the fact that inssurance drives the rates etc.If you manage to get interest rates of 27% like greece then hmmmm " net international investment" don't matter at all.Italy bended at 7%. Greece's example was pretty clear for everyone. When will Germany bend when the markets " discover " that it is insolvent - anyone is if you can play with his nterest rate - numebers will increase until it as a competent european comissar ro solve the mess.If Germany is not insolvent at 7% - I doubt it will resist so much - then it does not inspire any trust any more so it will be 10, then 15 etc until it's over. It's unwinnable.

I'm very sorry that I write for the first time when we have a little bit of a contradiction. You're blog is absoluttely inspiring and one of the best stuff I ever managed to find on the internet. You're one of the clearest minds writting on www - from what I found. I wanted to make it clear due to the facts that I wrote for the first time.

Of course what I wrote before might not happen. It's just a possibility. But right now it's happening in Spain. France is preparing. And we already hear about Germany. So it looks rather like a probability. And a high one.

All well and good. no transfers to save the euro, then, since that's not what Germany signed up for.But that still leaves the question of whether it really would be in Germany's interest to let the euro collapse. Maybe an unwanted transfer union would be the less catastrophic option?

@teoLet's assume that Germany would have to pay 7% interest to get new 10-year bonds.First of all, this would only apply as additional 7% on 8% GDP because debt is about 80% GDP / 10 year bonds ~ 8 % GDP. 7% of 8% ... plenty time to handle this correctly.Next, Germany is a net exporter = net capital exporter. We could push for a redirection of capital flows into our bonds. That would only require a change in regulation of savings & loan institutions and insurances, for example. There's much capital controlled by such German institutions, easily enough to pay for the government's needs (as evidenced by the net capital export).Finally, there's the option of simply paying back several % GDP p.a. as a long-term alternative to paying high interest rates.

These stories are very different between trade balance deficit and surplus countries.

@JibA transfer union would mean that we'd pay our trade growing balance surplus as transfer to trade balance deficit countries. Our workers would first accept low wages for competitiveness so export is strong, then they would be taxed to pay for Greek workers. Not going to happen, nor anyhow acceptable.The alternative would be a race to the bottom; all net exporters would reduce their competitiveness in order to avoid being net payers, and in the end Europe would lose much manufacturing and thus sustainable goods consumption. We'd become poor. Not acceptable.

I've seen what 75 billion € annual transfers did and do to West Germany. The Euro transfer would be much bigger. Totally unacceptable.

Italy can turn around with finally a useful government after a lost decade, Spain deserves a turn around despite its pre-crash economy (with all those promising figures) having been supported by a housing bubble.Ireland has an incredibly dumb government, but nevertheless might be able to succeed in the Euro zone.Portugal was never fit for the Euro (and joined despite everybody knew it was not fit), should leave and reform its debt into national currency.Greece was never fit for the Euro (and lied about it), should leave and reform its debt into national currency.

However - it really gets my goat when the Germans insist on their "important monetary policy standards" - when it's precisely those "important monetary policy standards" that are the main cause of the Euro's troubles.

If the Euro breaks up (which, as of now, seems very damn well likely), it will be because the ECB (largely because of German pressure) was afraid of 4% inflation.

It's the 1930s all over again. Back then it was the gold standard, now it's the ECB.

And I know I'm invoking Godwin's law, but you all need to remember this - it was the deflation of 1930-1932 that brought you-know-who to power, not the hyperinflation of the 1920s.

At the same time, you miss his main point on what actually caused the fiscal crisis in some European countries; the lack of flexible currency exchange rates led to accumulating imbalances. Greece and Portugal were worse off under the Euro than they would have been with an indigenous currency. The markets did place much unjustified trust into these countries and much capital flowed into them - a poor allocation of resources that turns out to damage the lenders.Italy had its homemade mess with incompetent playboy/playmate Cabinets for too long.Ireland saw its financial sector bubble burst and did a dumb public bailout.Spain had its housing sector bubble burst and got into the torrent of the crisis.

Monetary policy is not the cause; there's merely a debate over whether short term (ECB saves the day, but sheds its reputation) or long term (ECB preserves monetary stability and its reputation, countries need to address causes and don't get saved by money press) focus should prevail.Krugman tends to prefer the short term whenever possible (see his stance on stimulus, too).

As usual, every economist misses important details or undervalues them. It's easy to point out such negligence even in case of Nobel laureates and famous textbook authors. Economic theory is so damn complicated and rich of variables that no single mind can get it right - and models never seem to be able to create sudden trend breaks (such as a crisis).

By the way; Krugman also wrote that the Euro was basically an Italian plot to get German central bankers for Italy. :)

Krugman does raise some valid points (that why I quoted him - and hey, kudos for spotting that), but I don't agree with him entirely. He's a Keynesian, I'm more of a Market Monetarist (to the extent to which such a distinction is meaningful).

However, when you say "Monetary policy is not the cause", I have to say this - you are dead wrong. It was the cause in the 1930s, and it is now.The whole point of monetary policy is to guarantee macro-economic stability, not to worship at the altar of "low inflation".

And what kind of monetary policy is it anyway, when in order for Germany to have the kind of low inflation it likes - the Eurozone periphery gets pushed into painful deflation ?

Read Krugman some more. A part of the currency area would need inflation, another would need deflation. That's not going to be achievable for the ECB.

What's more, for this to work in the long run we'd need an ever-growing difference in PPP. We'd need flexible exchange rates. Krugman is short-term-fixated and doesn't look at this.

The whole currency area is too diverse and does not work. Either Germany has to leave (and a few other Northerners) or Greece and Portugal have to leave. Together in one currency area is simply not working without major transfers (that won't happen).

Considering that an indigenous currency helps to handle public debt, it's their turn (nobody can force us out and unlike the Southerners we can sit this out).- - - - -My idea of a cause is the 'earliest indispensable motivator', while you seem to declare that the absence of intervention is a cause. I disagree.

The CB does exactly what was mandated for it by the legitimated governments and legislatives. To exceed their mandate is no better than stealing. Their limits are democratically (indirectly) legitimated and need to be respected until an equally legitimated change is enacted. That's not going to happen, as it seems.Why do you arbitrarily blame the ECB? Why not blame those who wrote the relevant treaty?

That is still a distraction, of course. A distraction from the real driving factor; old school fixed currency exchange rates.

The ECB cannot change the fundamental problem of too diverse economies with a common currency, nor did it cause the same.

The ECB contribution to the crisis is so unspectacular that its accusers need to resort to blaming its passivity. Several card houses collapsed due to poor foundations and the town council that didn't shield the houses against wind nor stabilised them with ropes is under criticism.

But my point was that the Euro could be saved if the ECB allowed for a higher inflation target. But things being the way they are, they are insisting on the narrowest possible interpretation of their "low inflation" mandate.

You can't have a currency union between such diverse economies and very low inflation at the same time. Something's gotta give. Apparently, it's the currency that will collapse ...

I just wish Northern European countries would give up on their holier-than-thou attitude and accepted their share of the blame for the mess.

You are perfectly right. In its curent form the EU does not work. It will either collapse or the member republics and kingdoms will renounce at sovereignty. Neither the USA or the SSSR ever had the problem if they were/are hmmmm tranfer unions???? What is that? Never existed something like this in history and never will.All the rest is just talking in order to make noise. Either the Comission takes power, or the union will collapse. In order to manage this, the local power centers called governments of the union republics will have to lose a lot of atributions, what we generally call sovereighty.Of course we do not know if the comission and the european elites will succed. The alternative if for the civil war which started 2000 years ago with the collapse of the roman empire to continue.All previous attempts failed miserably.

WOW how can you be so hard headed as to think when people sign something they be held to it. LOL I think that many want to avoid having to have new votes on anything to do with EU matters. Funny they all talk about freedoms and such but fear putting things to a vote. If you had a EU wide vote how many would still be part of the euro?

You might find this interesting.http://fistfulofeuros.net/afoe/chart-of-the-week-imf-edition/

Regarding the real complexity of the European economy. It is pretty easy to use stereotypes but germany's financial status is not better then Italy's. It's just that Italy got hit first by the " financial markets". And if they hmmmm start to " discover" that hmmmm Germany is not so healthy as thought previously it's just a sign that DE is next on the hit list - hey it looks like they are stating reluctantly to discover ust that. And if you take into consideration the financial leverage of Germany's banks well what do you know Germany is much more fragile then Italy or that paragon of stability - Greece. If you have a leverage factor of 52!!!!! then there is no need to increase the interest rate ( due to risk insurance but it's just a detail)up to 27% like in greece. Just 2-3 % increase are more then enough to crush germany's financial system. Reality is much much more complex then media stereotypes it seems.

PS. I oversimplified to the extreme, sorry, but I'm just a guest here and have to keep the message short. Don't want to upset our host.

The problems of banks are mostly the problems of banks and little more, the industry has prepared itself for a credit crunch / has adapted. Corporations finance themselves in great part through their own emissions of bonds and SMEs have diversified their access to credit.

In regard to public debt (in the federal context):This has to be seen in the context of expectations regarding the ability to pay the creditors. Germany could probably have twice the %GDP public debt figure and still be better off.

An open economy (= with trade) introduces additional variables, other than %GDP.The difference between a trade surplus and a trade balance deficit is important. A country that pushes goods valued at hundreds of billions € into foreign possession per annum in exchange for mere promises of pay has -as a whole- a lot of capability to pay its creditors.

I think that recent developments pretty much cleared a lot of fog regarding what is happening in Europe. It is becoming a federal state. Not a " transfer union " - pretty hard to define something like that because it never ever existed on this planet - but a normal federal structure. At least that's the plan, does not mean it will succed.

About individual nations, well the atempt is to create a european people. If you have any connection with european universities this would not surprise you. The number of students going to study in other countries is absolutely staggering. All that the system has to do - with enormous financial expenses and a lot of adminstrative work, not easy anyway - is to put european young people together. Hopefully age and hormones will take care from that point in order to create the european people. Just like before when king Vittorio Emanuele II told Giuseppe Garibaldi “We made Italy, now we have to make italians”.It will probably take generations if it is even going to succed. The alternative is a replay of our history, and it was not pleasant.

An interesting quote fron Lenin, it didn't evolve exactly as he said but the essence is there nonetheless:"In this sense a United States of Europe is possible as an agreement between the European capitalists ... but to what end? Only for the purpose of jointly suppressing socialism in Europe, of jointly protecting colonial booty against Japan and America, who have been badly done out of their share by the present partition of colonies, and the increase of whose might during the last fifty years has been immeasurably more rapid than that of backward and monarchist Europe, now turning senile."The union is created not to protect but to get back what was lost, its going to be socialist rather then antisocialist, Japan was already crashed but China more then replaced it etc.A lot of details are different but the essence is there I think.

The big union of the people is struggling to come to life. It's been a long and arduous trek.

Talking about Germany protecting its Sovereignty now is hmmm similar to talking about the way Prussia protected its .... Sovereignty when it created the second Reich. Surprise .... it didn't. It was all about something else.

"The Zollverein, or German Customs Union, was a coalition of German states formed to manage customs and economic policies within their territories. Established in 1818, the original union cemented economic ties between the various Prussian and Hohenzollern territories, and ensured economic contact between the non-contiguous holdings of the Hohenzollern family, which was also the ruling family of Prussia. It expanded between 1820 to 1866 to include most of the German states" etc etc.And surprise. They were not building a transfer union and didn't protect their sovereignty.But a lot of treaties were signed anyway. They didn't mean anything of course but they were signed nonetheless.

About sovereignty. What I will write has the most tangential connection possible at first sight but I think it somehow affects the subject.

German demography. Numbers are aparently simple and easy to understand but it took me years to be able to put numbers into perspective.Obtaining german numbers is harder then getting information fake or not about pakistani nuclear arsenal. Numbers which make sense I mean. I am absolutely certain this entire statistical mumbo jumbo is intentional.

German population in 1956 was 71 milion. I chose 1956 because the refugee population was already there and all were counted for. Prisoners were back all of them - exceptions are statically insignificant.Emigrants hadn't arrive yet.

So we are talking about german ethnical group living on todays teritory. A small baby boom was taking place during the time so population increased a little.

Today probably the number of inhabitants is 82 million, maybe less.Out of this someting like 16 milion has a foreign background. How many are ethnic germans mixed or not comming from FSU is pretty hard to find out but probably 2.5-3 million. Anyway they came very recently. How many are mixed with german population which existed before the emmigration wave is of course impossible to find out so I'll that out.So we have a number of around 65-66 million etnic germans down from 71 million in 1956. And the former number has to be corrected. A lot of males were missing so the number for a normal demographic profile would have been 75-76 million.

And todays 82(?) million produced .... 650 000 babies. Out of this 30(??)% have foreign background. ( I think the percentage is a little larger. Babies are born today in maternity yards. So counting them and having a precise identity and origin of their parents, you declare the babies as a parent, is not as hard as when king Herod was trying to grab baby Jesus. So 27 or 34 percent is possible, even 27,5 . 30 just doesn't sound right, except if it masks a little bit larger number. Suppositions anyway, not based on anything.)Anyway the number of etnic german babies from german parents, refugees from the 40s or not, amounts to the impressive number of ... 455 000.

The number is the same as of polish children - small diference, I had to give a reference - and much smaller then the number of spanish children. The 2 examples above are demographic basket cases, catastrophes. Jut to create a perspective of how bad the situation is in Germany.

What completly amazes me is the intensity of debates about market share of german companies, about exports , about fiscal stability ( nonexistent one but thats another discution ) when the german people - german ethnic group more precisely - is dying. Dying as in death not through assimilation, emigration whatever.

And having a saner policy does not mean any sort of neonazi policy. Just paid maternity leaves - Elterngeld - and acces to day care so that mothers can return to work. Now big big discution that in the last 4 years - up to 2010 - the huge enormous amount of .... 15 billion euros was paid to german parents on parental leave - rather to all parents living in Germany but that's another discution. This for one of the worlds top economies. It's true it's a huge amount for Guatemala or Honduras. But for Brazil is ayn't or for India or Mexico.And for Germany is small change.

It looks like the commercial caste ( I don't have a better term to define the loose group controlling german society and economy ) which took over after the military caste went out of business is leading the people and the country to a far bigger disaster then the previous one created by the military caste( didn't have a better term). At least the military caste left a pretty large number of young females behind. The country was obliterated but the future mothers survived so the country was reborn. Right now numbers seem great from a corporate perspective - market share, cash flow etc etc - but in reality the nation is dieing.

Just another comparison for perspective and I stop with numbers. I give the numbers from memory so minor errors are possible.In 1940 the number of military age men in Germany ( true the Reich had a larger population in 1940 then the one from 1956 but if you consider the number of death and birth postponed due to the war etc it gets close) , between 18-34(?) was 9.4 million. In France was 4.3 million for the same age segment.Last year to Germany's 650 000 babies in France 835 000 babies were born ( I know about the huge number of emmigrants to France, but now talking about global numbers. France's demographic composition today are not harder to find then Germany's. They are completly imposible to find. It's like talking about the Klingon Empire, just fantasy and no facts to check). And France is not Afghanistan when talking about giving birth.Just to understand the proportions of the german disaster.

And incredibly all we hear are discutions not about maternity leaves, kindergardens etc but about hmmmm Germany being a top exporter. In chemistry for example :)) .

Whats the use of sovereighty, of market share, of anything I ask if the people is dead or dying. I remember a memorable public speech of Putin from early 2000s. Trying to quote from memory : "We are trying to build a strong , prosperous safe country etc etc. But for whom are we working today? If the people is dying all our effort are in vain, are worse the useless. So the first priority of the government is to help mothers, so they can afford to give birth to the next generation." And the government behaved accordingly. That is sanity and normal Human behaviour. Elementary logic not some quantic physics.

The german former way of somehow connecting giving a small stipendium to mothers during maternity leaves in order to buy diapers and powder milk for small and fragile babies to .... neonazism by default of being a natalist policy seems absolutely incredible and unbelievable. And the former ability of seeing a connection between daycare and neonazism is something out of this world, outright schizophrenia. Except hmmmmm paid maternal leaves and daycare hmmmmmm reduce the ability to produce exportable goods. Reduces the available labour force and its motivation and efficiency. And from a commercial perspective this is very bad and can not be allowed to happen. And it becames quite rational from this perspective. The commercial caste sacrificed its people for market share and a large cash flow. That is what they are trained for, its not their fault I suppose. They did to the best of their abilities what was expected and requested of them. But facts remain.

And now the connection with the original post. What sovereignty? For whom?Quotation: " the German government that pursues German interests - as is our right since we regained sovereignty." :)):)):)):)):)):)):)):))

Sorry for the long posting. The subject is of great interest to me and it should also be for the german government and managerial class also. It is also important for any debate about Germany's role and status in Europe. If you check the numbers above - they are a small, tiny part of a picture but hey it's just a comment on a forum of a blog, I can write from memory the demographic history of the world in numbers with small exceptions and the degree of incertainty generated by what we know and the politicised approach inevitable for any era which affects data - all discutions about hmmm Germany imposing its will, building the 4th Reich, trying to dominate the continent and to win .... World War 2 through non military means etc become just rubish. What are that small tiny number of future germans going to dominate? Probably the teritory of the German republic. And not even all of that, definitely not the major cities. So much with the german conspiracy theory of evil germans trying to take over the continent I suppose.

This would have been the better post.http://defense-and-freedom.blogspot.com/2009/06/europe-bashers-and-their-next.html

The 1956 figure is likely only West Germany, you forgot that about 16 million East Germans with minimal foreign population between then (few Vietnamese mostly) were added two decades ago.

I don't see how the migrants are a special problem. The society is becoming more overtly heterogeneous, but that rather replaces the old regional heterogeneity which was both problem and quality as well.

The German state and society are not fixated on some mythical German DNA, but on culture and a perception of belonging together. Have a look at the origins of the people of Berlin and you'll see that their ancestors from 300 years ago were in majority not "Germans", but the people of Berlin are overwhelmingly not counted as migrants nowadays.I have some migrants from past centuries in my lineage as well.

The migrants of today are not average Germans, but who is? We've always had many subcultures. I've listened to "Turks" in Germany when they talked about Turkey and most of these young "Turks" talk about Turkey as an American-Italian would talk about Italy. Most of them reported that they were easily recognised as foreigners in Turkey.

The introduction of the guest worker scheme was stupid politics, serving only special interests. Given the status quo with no acceptable option of reversing this history, it's best to simply look at them with social goggles: Most Migrants are lower class and few of them are on a 'good education path'.The right thing to do nowadays is not hysteria, but to simply push the lower class into good education and jobs - be they "old German" or "migrant".

The number from 1956 is for both DDR and West Germany. West Germany had 53 million back then.

I don't see anything wrong with migrations. My background also is quite mixed. What I was talking about in the second part of the comment is that a system which leads to the extinction of the people involved, who are supposed to be the beneficiaries is wrong.

In modern urban society having children is quite hard. Survival on ine income is not a nice option for middle class families with children. So help from the community through some paid maternity leave and then daycare is vital. Neglecting this and concentrating on market share is a crime against the people which form the respective society - be them natives or emmigrants.

I managed somehow to deviate from what I was trying to say.Size does matter and Germany's share of european population is rapidly falling - at the young segment of the population for now. The attempt was to comment about the fact that discutions about german status in EU are not relevant if they don't take into consideration this fact.( And the energy side - but that's another discution).The country is in a far worse position than it is supposed to be from the media image.

Returning to the deviation.A higher fertility means mothers have to stop working for some period of time. Afterwards a part of them will work part time.A large number of the remaining labour force will work for daycare - lots of people involved, kindergardens, schools, health system etc.None of them can produce exportable goods.And then hmmmm kids also consume diapers, milk, textiles, small furniture items, then larger ones etc etc. Lot of consumption, meaning also a lot of expenses. All this items are either locally produced - meaning less exports, due to manufacturing capacities working for local market - or imported meaning a reduction or eliminaton of surpluses.The example for this is close by - France.So the german industrial/commercial machine - your expression is special interests, I think - had to sacrifice the german people in order to be able to gain and mentain a large market share in various field of activity and to produce a large capital surplus which can be invested.And then after this line of action a solution was found to bring in emmigrants to replace the missing kids.And everything was packed and sold as great strategic and economic thinking.I think this behaviour is rather dumb and wrong.( The type of criminal incompetence which could get you shot in SU when Iosif Vissarionovici was leading.)

************************************************I had to stop learning german due to having a very busy schedual this years ( and being lazy but that's a secret). One of the main reasons was to understand how german top echelon structures can be so very wrong each and every time. In different and creative ways each time but completly off mark everytime. For this I really have to be able to read german sources directly, something which I'm not yet able to do. It's like in the joke about three ways to do something. The right way, the wrong one and the army way. Up to medium hierarchical level germans are absolutely exceptional, top of the class. A class of their own. Higher up is another story. This implies further study.Like the case we talk about: sacrificing afordable family formation of the people in order to.... destructure the manufacturing capacities and commercial balances of the commercial partners. Who would have thaught about something so very ingenous like this? Nobody else it seems. ************************************************

Not the emmigration part was a problem I think, the one with putting great presure on the labour force and compressing consumption. With great results like sacrifing the ability of the inhabitants of the country to afford family formation and the blowing up of the commercial balance of economic partners.

Of course economic incentives have different impact on different groups according to their value system.

PS. Chose 1956 because in 1946(?) West Germany had 38 million inhabitants. Demography is much more dynamic then people generally understand. Cycles are too long to be visible if you are not very interested about the subject. Like the russian or french top decision echelons are. By the way both are large immigration destinations, Russia being the second after US. Their actions at helping mothers are not born from believing in any national DNA or other mythical fantasmagorias.A southern Russian proverb has it: Papa turok, Mama grek, a ya russky chelovek (Papa is a Turk, Mama is a Greek, but I'm a Russian).

I re read your comment about economic incentives for getting pregnant. It is true today. Problem appeared three decades ago.

About changing demographics well it implies too long a comment.

"It just doesn't fit into life planning till the 30's, and then women often don't get more than one child."Well you are perfectly right but somehow France managed to solve this. And now I think Russia is about to do the same, we shall see if they succed or not.It looks like a small number of children makes society less tolerant to parenthood and people considering that very small families are normal. Turning it around seems rather difficult.